EMI Adds Insult To Bankruptcy In Misguided Gloating Over MP3Tunes Demise

from the time-poorly-spent dept

We already wrote about EMI’s success in bankrupting MP3Tunes via overly aggressive litigation. But, now the company has decided to add insult to bankruptcy with a bizarrely gloating statement provided to News.com’s Greg Sandoval.

Since November 2007, EMI Music and EMI Music Publishing have been engaged in a lawsuit with MP3tunes and its principal, Michael Robertson, in connection with Mr. Robertson’s facilitation of widespread copyright infringement on MP3tunes.com and Sideload.com. These sites have built their businesses on the unauthorized distribution of music, at the expense of EMI’s songwriters and artists.

Here, they’re simply lying. The court ruling in the MP3Tunes case stated explicitly: “MP3tunes did not promote infringement.” To claim otherwise is to ignore what the court stated flat out.

Now on the eve of trial, and after an ongoing press campaign claiming that MP3tunes would fight to vindicate its ‘right’ to infringe, Mr. Robertson has filed for bankruptcy protection for MP3tunes in the Southern District of California. After four and a half years of Robertson’s bluster and rhetoric, it is apparent to EMI that Robertson has finally realized that his case has no merit.

While Robertson may believe that MP3tunes will be able to escape liability in the upcoming trial through this bankruptcy, Robertson himself is still a named defendant in the case and the Court has already determined that both he and MP3tunes have infringed EMI’s copyrights. As such, he is facing personal liability both for infringements that the Court has already determined have occurred and for the further alleged infringements that will be addressed at trial. Accordingly, EMI will continue to pursue its case against Robertson, to ensure that its songwriters and artists are properly compensated for their creative work.

This makes no sense, and is even self-contradictory. As they state above — and which everyone here knows — filing for bankruptcy does not get you out of a copyright damages award. Thus, there is no reason whatsoever for the company to file for bankruptcy “to escape liability.” That’s impossible. The only reason to file for bankruptcy is because the company is out of money from fighting the damn lawsuit. And it’s bizarre for EMI to claim that Robertson realized his case has no merit, considering that he mostly won the original lawsuit. Yes, there were a few key points that he lost on, which may turn out to be expensive if he loses on appeal and depending on the damages calculation, but the key elements of the case were won by Robertson and MP3Tunes.

It seems here that EMI is simply insulting Robertson out of spite. In the meantime, Robertson has pointed out that EMI spent $10 million suing him — or more than the entire cost to build and run MP3Tunes. Remember that some exploration into how much EMI makes from Katy Perry’s hugely successful album showed that the label probably ended up with about $8 million? Yeah, so basically it spent more suing Michael Robertson than it got from Katy Perry. Perhaps that money could have been better spent. No wonder the company was taken over by a bank and then sold off in pieces. Its priorities are a complete mess.

Filed Under: , , ,
Companies: emi, mp3tunes

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “EMI Adds Insult To Bankruptcy In Misguided Gloating Over MP3Tunes Demise”

Subscribe: RSS Leave a comment
57 Comments
jakerome (profile) says:

EMI suing itself into bankruptcy

That’s the real tragedy, in the Greek sense. All these lawsuits are wasting tens or hundreds of millions of dollars on lawyers. While at the same time crippling their business operations in order to facilitate the sue-first strategy of EMI & other RIAA members.

I can’t keep track of who’s been bought & who’s gone bust. But in the end, it won’t be “piracy” that ends the reign of Big Music, rather it will be their own courtroom-centric business strategy.

Anonymous Coward says:

Do companies in the position of MP3tunes have any real remedy? I’m in the early stages of forming a startup (software, not music), and bogus patent lawsuits are one of my primary concerns. Is there any effective defense against a big company throwing money at their lawyers to drown you in legal costs (even if you successfully defend the case)?

E. Zachary Knight (profile) says:

Re:

Sadly, as long as there are still appeal options for the losing party (the big guys with lots of money) there are no solutions for the little guy. Once all appeals are exhausted, you might be able to recover all or most of your legal costs in the end, but it is a pretty sad “remedy”, especially if you had to declare bankruptcy in the mean time.

Ninja (profile) says:

EMI suing itself into bankruptcy

Actually we should be partying. They spent more in this lawsuit than with one of their blockbuster pop stars which mean they are right on track for a painful, bankrupt death. And along with that they helped pave the road for future services similar to MP3Tunes. And I do hope they sue Google and Amazon for their music lockers so they’ll die an even faster death so the world will be a better place. It’s no tragedy, it’s just one damn big good news.

Ninja (profile) says:

Re:

And they say our judicial system is balanced. For me it’s obvious that in a lawsuit where one of the sides has too much financial advantage there should be a mechanism to allow the smaller side to use Government money to build the defense. In case of a loss the ‘loan’ should be paid but in case of a victory the big player should pay ALL the costs, regardless if one or two points were rejected by the court.

Anonymous Coward says:

They said: Court has already determined that both he and MP3tunes have infringed EMI’s copyrights.

You said : The court ruling in the MP3Tunes case stated explicitly: “MP3tunes did not promote infringement.” To claim otherwise is to ignore what the court stated flat out.

which is it, or is this just more word parsing?

Loki says:

We at EMI would like to announce we have driven yet another of our growing competitors into bankruptcy. Of course, in the process, we’ve also driven ourselves out of business by wasting tens of millions of dollars on costly litigation that could have been better spent on trying to actually compete in the marketplace.

We encourage our fellow major labels (most particularly Universal Music Group) to continue to follow in our wake until they too litigate themselves broke and are all gobbled up in turn, until there is but one (there can be only one) which will most likely be Sony.

Given that corporations are people, it is our unwavering hope that Sony will then be able to get themselves declared an endangered species to forestall any anti-trust or monopoly lawsuits that might be possible.

Yours truly, the soon to be extinct EMI.

RD says:

Greater Enforcement vs. Adapting and Innovating?

So, can we now finally put-paid to the idea that the solution to the music industry’s problems is greater copyright restrictions and enforcement, and agree that maybe all that time and money would be better spent creating new markets, new technologies, and leveraging the ones already in place, to expand the pool of customers and increase revenues?

Trolls? Shills? Got anything to say about this?

Anonymous Coward says:

Defender

Which is a shame!

I’ve read here and there that guys planning to make start ups and other services are thinking about moving out of the US and venture capitalists are skeptical about where they put their money in fear of future litigation due to copyright and patent issues in a nearby future.

Good for the guys outside of the US who may see their tech industries grow strong, but ultimately bad for the US economy that loses both new business and work posts in one of the fastest growing sectors of the economy.

jakerome (profile) says:

EMI suing itself into bankruptcy

Tragedy, in the Greek sense. http://faculty.gvsu.edu/websterm/Tragedy.htm

Tragedy depicts the downfall of a noble hero or heroine, usually through some combination of hubris, fate, and the will of the gods. The tragic hero’s powerful wish to achieve some goal inevitably encounters limits, usually those of human frailty (flaws in reason, hubris, society), the gods (through oracles, prophets, fate), or nature. Aristotle says that the tragic hero should have a flaw and/or make some mistake (hamartia). The hero need not die at the end, but he / she must undergo a change in fortune. In addition, the tragic hero may achieve some revelation or recognition (anagnorisis–“knowing again” or “knowing back” or “knowing throughout” ) about human fate, destiny, and the will of the gods. Aristotle quite nicely terms this sort of recognition “a change from ignorance to awareness of a bond of love or hate.”

Anonymous Coward says:

Re:

“So the taxpayers end up financing every small business that finds itself in an intellectual property lawsuit? There’s the stupidest idea of the year and it’s only May.”

Actually, we’re already pretty much funding businesses as it is. You can look up how much some of those big corporations (who outsource pretty much everything) receive after getting tax breaks and it’s ridiculous. Some of those companies make literally hundreds of millions of dollars off the tax payers.

So if it’s okay to receive tax breaks for shipping jobs and production outside the U.S. while writing it all off, why not finance a legal fund that allows for small businesses to receive some aid in intellectual property lawsuits? We already have funds set aside for small businesses to apply for and receive funding to provide training for their employees.

You want stupidest idea of the year? Pretty much anything you say, you’re a real Negative Nancy. I’m sure you’re one of the same people talked about in the article the other day about tearing down artists who try new things. If EMI can’t take a cut of an artists’ funds or beat down the company which did not commit copyright infringement then there’s something wrong with the world, am I right?

Anonymous Coward says:

this seems to me to be the typical strategy. someone with loads of money sues someone until they have no money left to fight with, then spout out about how you are the winner and that the win has come about because the loser has given up. all that has happened here is that yet another of the ways for people to get music has been destroyed. what is so sad is that i recently read how the labels reckon there are more legitimate ways available than ever before. that may be true, but the prices charged, the formats available and the never ending DRM are what keeps customers from embracing them. this has just stopped another source, done simply out of jealousy!

John Fenderson (profile) says:

Re:

Is there any effective defense against a big company throwing money at their lawyers to drown you in legal costs (even if you successfully defend the case)?

Not really.

There are a number of things you can do to reduce your risk, but the risk will always be there. First, incorporate as a real corporation (not an LLC or subchapter S) to gain the “corporate veil” (and make sure that you are very uptight about keeping the company’s finances and your personal finances entirely different things. You get a salary.) This will make it more difficult for them to personally bankrupt you if they decide to ruin your business.

You should also consult with a business attorney specializing in these issues. There are procedural and recordkeeping things you can do that won’t provide a complete defense, but will make you a less attractive target.

If your risk is very great, and you expect a good profit, then you can also purchase insurance against such things. It is expensive, though, and typically not worth the cost.

Personally, I’ve been comfortable with just doing the incorporation for my software business. I’ve never had a lick of trouble, but if I did, it provides a bit of a firewall so at worst I’d lose the company and not my house, car, etc. And you can always start another company.

Anonymous Coward says:

Re:

So if it’s okay to receive tax breaks for shipping jobs and production outside the U.S. while writing it all off, why not finance a legal fund that allows for small businesses to receive some aid in intellectual property lawsuits?

In my opinion, it’s NOT okay to provide tax credits to ship jobs overseas. Yet the tech companies seem to be doing just that. Are any consumer electronics manufactured in the US? Between that and abusing the visa system to import engineers from India and other third world nations to avoid paying the salary commanded by an American is a scandal. No company in any industry should be incentivized to export jobs or import cheap, foreign labor.

Anonymous Coward says:

Court Cost Balancer

It might make more sense to work that in the opposite direction: Regardless of how much funding one side has, they will be obligated (under insta-loss rules) to only use as much funding as the smaller player has available for their legal defense.

So this is the part where you ignore free speech rights? Got it.

Anonymous Coward says:

EMI suing itself into bankruptcy

EMI is and has been dead in the water for decades as a record company. They only live on The Beatles and if they loose the way of abusing that copyright they are more or less bankrupt.

What they should do. Well, I quote Sir Paul Mccartney:
“You used to say
live and let live.
But if this everchanging world in which we live in
makes you give up and cry;
say live and let die.”
(Paul Mccartney and the Wings, Live and Let Die, Live and Let Die, 1973)

Cowardly Anonymous says:

Re:

Nah, there’s a better place to get the money from. We already have statutory damages for the losers if they are the defendant. Implementing damages for the plaintiff for wrongful suit (proportional to all expenses paid in the suit) and placing them in a fund for those finding themselves unable to sustain a defense would be a much better place to take that money from. Replace the incentive to draw out the process with a firm disincentive.

Cowardly Anonymous says:

Re:

Infringement occurred on the site. The site did not promote it.

Thus, they may have technically infringed (via a user submission or bookkeeping error) but not be liable under safe harbor provisions or some other defense.

Kind of like how someone who kills in self-defense would neither promote murder nor be found guilty for it, despite the very real fact that they killed someone.

The world is very rarely dichotomous, no matter how hard so many people try to force it to be.

Anonymous Coward says:

“Since November 2007, EMI Music and EMI Music Publishing have been engaged in a lawsuit with MP3tunes and its principal, Michael Robertson, in connection with Mr. Robertson’s facilitation of widespread copyright infringement on MP3tunes.com and Sideload.com. These sites have built their businesses on the unauthorized distribution of music, at the expense of EMI’s songwriters and artists.”

Aint propaganda, grand

Anonymous Coward says:

Court Cost Balancer

Here’s a clue for you: Who are you to tell me how many lawyers I can hire, how vigorously I can pursue my legal rights and how much money I can spend doing it? You seek to censor me by limiting my advocacy on a matter I feel passionate about? Go pound salt. My First Amendment rights are sacrosanct. How dare you seek to limit them simply because I happen to have more money than my opponent.

Anonymous Coward says:

Court Cost Balancer

Perhaps you’re not as stupid as I previously thought. Just in case this was some weak attempt at sarcasm, I offer the following:

In the landmark 1976 case of Buckley v. Valeo, the court said that ?virtually every means of communicating ideas in today?s mass society requires the expenditure of money,? so restricting campaign spending meant restricting political speech. The First Amendment required that political speech be unfettered, so the same was required for political spending.

Got it?

Anonymous Coward says:

Re:

Sounds fair. So when Wikileaks sues Paypal for cutting off payment processing services, it should bear the entire cost of the case- including Paypal’s defense. The price of being an aggressor, as it were.

BTW, you are out of your mind. Why don’t you just sway what you mean. You think the side you agree with ought to pay and have limited legal rights. Isn’t that closer to the truth? Because what you actually said was utter nonsense.

Jonathan says:

Court Cost Balancer

It’s a right shame that the only Amendments most people ever read is the First and Second, as the other eight in the Bill of Rights are falling to pieces.

But you are right. You absolutely should be able to pursue with maximum vigor the privileges granted to you by law, and it is rather difficult to prevent that without stepping on other fundamental rights. Therefore, the more palatable solution, per the Equal Protection clause, is to take away the privileges you are abusing, through a) copyright reform and b) taxing all that idle money the Devil has made work for.

The Moondoggie says:

Greater Enforcement vs. Adapting and Innovating?

>>the solution to the music industry’s problems is greater copyright restrictions and enforcement

You’re mad! The solution is to burn them all to the ground and enhance technology further.

>>all that time and money would be better spent creating new markets, new technologies, and leveraging the ones already in place, to expand the pool of customers and increase revenues

For companies like EMI? You’re mad!

TDR says:

Re:

And because of that right of appeal, the judicial system is constantly clogged up with suits that should have been definitively decided long ago, to say nothing of companies deliberately drawing out the process for their own gain and to decimate their opponent. Forbidding them from appealing would stop that. Or at least limit it to one appeal and one only, which would limit that ability.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...